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A Handy Guide to E-Commerce Business and Revenue Models

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Photo by Şahin Sezer Dinçer on Unsplash

E-com business models have existed for many years now. Many industry giants, including the leading marketplaces like Amazon and Alibaba, generatebillions of dollars as their revenue. Amazon launched the most primitive form of their e-com store back in 1995, and that business model had shown an exponential growth through the first couple of decades of the 21st century. During the period of a global pandemic in the year 2020, retained e-com sales had marked a record growth, and a big volume of retail sales had been shifted permanently to the online space during this period.

In simplest terms, e-com is buying and selling products and services online through the internet. There can be various types of e-com stores based on the seller’s and buyers’ needs. In this article, we will try to break down various business models in e-com that fit different needs and revenue models in this industry.

  • Understanding e-com business models
  • B2B or Business-to-Business
  • B2C or BusinesstoConsumer model
  • C2B or ConsumertoBusiness
  • C2C or ConsumertoConsumer
  • Understanding e-com revenue models
    • Subscriptionbased revenue
    • Sales revenue model
    • Some real-time examples of e-com business models
    • Amazon
    • Shopify
    • BigCommerce
    • WooCommerce
    • Wrapping things up

Understanding e-com business models

Aspiring e-com business entrepreneurs need to understand the e-com business model and set up a successful model for lasting results. The online business space is largely competitive, but the most reassuring fact is that there is equal opportunity for all players competing out there. It is important that one should understand your apt business model, know the nature of your target audience, and the apt structure to align the best to your customer needs. Before you consider the revenue model and options for consumer need fulfillment, you should first understand your customers and what products and services you are offering them. Here are a few real-time examples of e-com business models.

B2B or Business-to-Business

In the B2B model of e-com, a business may sell its products to other businesses. These are usually high-value transactions. Say, for example, Chocomize offerings streamlined operations by offering corporate gifting items, which will help spread awareness of your brand and satisfy the client’s needs.

B2C or BusinesstoConsumer model

In B2C e-com, the businesses used to sell products to individual buyers who are the end-users of these products. Say, for example, you may be purchasing many things from Amazon, one of the largest B2C marketplaces globally. Amazon retailers will be listing their products out there, and you can purchase them through the portal, which is being backed up by Amazon user security protection and customer service.

C2B or ConsumertoBusiness

This is not a very common platform, whereas in the C2B model, an individual, usually a freelance or independent professional consultant, sells services to the companies or other end-users online.

C2C or ConsumertoConsumer

In the C2C model, products and services are exchanged between end consumers at an online marketplace. Individuals may sell their products to another individual through this platform.

For e-com business database management, you should rely on the services of a reliable database management consultant. RemoteDBA.com is a professional service offering remote business data management services. Further, let us explore various revenue models in e-com businesses.

Understanding e-com revenue models

Subscriptionbased revenue

This is a primary revenue model, in which a company will charge a subscription fee as hourly, daily, weekly, or monthly for the services they offer over a period of time. To generate revenue in this model, you have to offer a niche product and a cost-effective sourcing mode. This model can be highly profitable, but for the strong businesses who do proper research and groundwork before hopping on to adopting this.

Sales revenue model

This is the most popular revenue model in e-commerce, where revenue is generated from selling services and goods directly in B2B or B2C markets. This is the digital counterpart of brickandmortar stores. There are different types of e-commerce portals functioning in this revenue model. For example, North Face is a single brand e-com website, which only sells a specific product. Some other stores like Etsy etc., list products of many vendors from different parts of the world being sold through their website.

Some real-time examples of e-com business models

Amazon

Fulfillment of online sales through the Amazon marketplace is increasingly gaining in popularity now. Amazon is now the No.1 e-com fulfillment network in the world. Having a seller account with Amazon, you can create an FBA business online. The primary benefit of this model is that you can store your products in the fulfillment centers maintained by Amazon. The shipper will pick it up from the fulfillment center and package it to deliver through their shipping network. Amazon also offers customer service to your products. Leading marketplace sellers have started to adopt the FBA model to avail warehouses by Amazon, fulfillment support, and the reliable customer base of Amazon for their financial gains.

Shopify

Shopify also dominates as a leading e-commerce platform. An interesting fact about Shopify is that every 28 seconds, one or another new entrepreneur lists their products for sale on this platform. More and more first-time entrepreneurs are also building their stores on Shopify.

BigCommerce

BigCommerce is an e-com business platform that comes with a tagline as “E-com for the new era.” This platform enables different e-com experiences for the new age sellers and buyers. For the businesses looking forward to listing their products, BigCommerce offers a space to build their store and offers many add-ons launches and manage services like technical account handling, customer success management, etc.

WooCommerce

For those building a WordPress-based e-com portal, WooCommerce is a great plug-in that helps build e-stores. It will help you to sell products and services online in a cost-effective manner. WooCommerce is so easy to customize and also comes with many add-ons features to be included in the new-age e-com stores.

Wrapping things up

The other technologies you can explore to set up an e-com business online are Wix, Zyro, Squarespace, and many others which offer man unique benefits and features based on your customized needs. These e-com store builders can offer you various order fulfillment options, drop shipping avenues, in-house fulfillment support, and so on.

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